Mike Gleason:

So Congress reached a deal at the 11th hour to re-open the government. No surprise!

What is somewhat surprising – or fishy, according to some precious metals analysts – is how quietly gold and silver prices traded throughout the 16-day budget battle.

Here we have a serious fiscal crisis with the government partially shut down. We have rampant speculation about ratings downgrades and even warnings from the Obama administration of the potential of a partial default on U.S. government debt obligations. And yet, gold and silver do nothing until the crisis is resolved. Doesn't seem to make sense, particularly since the metals responded so differently last time around in 2011.

It isn't unreasonable to ask whether some of these strange market moves are orchestrated. Officially, of course, there is no manipulation of the precious metals markets. The Commodities Futures Trading Commission recently cleared JP Morgan of charges that it illegally manipulates silver prices, though the CFTC did acknowledge that the mega bank exerts "influence."

Meanwhile, the Federal Reserve and the cartel of the world's central banks are impervious to being independently audited. When they enter the precious metals markets, they can do so surreptitiously. For all we all know, they may have colluded to help keep financial markets calm during the deadlock in Washington.

In any event, it's been resolved, at least temporarily. The debt ceiling now goes up through February 7th of next year, with current spending levels authorized through January 15th.

Between now and then, the Federal Open Market Committee is almost certain to hold off on tapering its $85 billion monthly bond buying program and remain fully accommodative. The last thing they want to do is upset the Treasury bond market ahead of Janet Yellen's ascension in this environment of legislative and administrative brinksmanship. A die-hard inflationist, Yellen is soon to replace outgoing Federal Reserve Chairman Ben Bernanke early next year.

Another reason why the Fed appears unlikely to reduce stimulus anytime soon is that despite the stock market heading for new record highs, things aren't looking so good in the real economy. There's been a dearth of official economic data over the past couple weeks due to the government shutdown, but you can bet Federal Reserve officials have been closely watching indicators such as Gallup's Economic Confidence Index. As the shutdown commenced, this measure of Americans' confidence in the economy suffered its biggest drop since Lehman Brothers collapsed in 2008.

Also, economists estimate that the disruptions caused by the partial shutdown – which effectively gave federal workers another paid vacation – will shave about a half percentage point off of 4th quarter GDP.

On Thursday, the U.S. dollar index fell to an 8 ½ month low, helping to fuel a rally in precious metals. Gold gained an impressive 2.8% on the day, closing solidly back above the $1,300 level. Silver tacked on a little more than 2% to close just shy of $22 per ounce. Platinum and palladium were also big winners on the day, each gaining around 3%.

As of this Friday morning, the metals are pretty flat and hovering around yesterday's closing prices with gold at $1,318 and silver right at $22.00 as they look to finish the week with some bullish momentum. Whether the lid has been lifted for a strong year-end rally remains to be seen.

Now the fact that the metals didn't attract much of a safe-haven bid during the budget fiasco caused some gold bugs to get discouraged. But these markets often move counter-intuitively. And as I noted last week, the talk of a default was just for show. An actual U.S. government debt default was never at any real risk of occurring.

The real risks going forward however are that the government stays open at its current size, the debt ceiling keeps getting raised, and the debt keeps growing – forcing the Federal Reserve to commit trillions more in its efforts to keep the bond market propped up – a steady depreciation of the dollar with no political fix in sight.

When the precious metals markets awaken to these clear and gathering threats – and perhaps they are starting to – gold, silver, platinum, and palladium stand to get revalued at higher prices.

Lastly, and before we sign off for this week don't forget about our fantastic month- long gold special. During October we're slashing our prices on one ounce gold bars – and throwing in free shipping to boot! Already the cheapest way for retail investors to buy 1 oz gold bar, our hallmark one-ounce gold bars are available for just $39 per ounce over the gold spot price, no matter how many, or few, you buy.

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To inquire about pricing on or to place an order for these, or any of the other products we sell, check out our secure website at www.MoneyMetals.com or call us at 1-800-800-1865 and one of our knowledgeable and no-pressure Specialists will be happy to answer any questions you may have, even if you're not quite ready to buy.

Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that remain fully committed to getting you the most value for your depreciating dollar... with speed, with accuracy, and with top notch service. Have a great weekend everybody.

Announcer:

Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.

Mike Gleason is a Director with Money Metals Exchange, a national precious metals dealer with over 80,000 customers. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.